THE JOURNAL OF THE COMMITTEE ON MONETARY AND ECONOMIC REFORM

$3.95 Vol. 25, No. 6 • June 2013

Contents Chapter 17 of a new book by Ellen H. Brown,

5 From Austerity to Prosperity The Public Bank Solution Through Proper Use of Our Publicly Owned Bank of Canada 6 Germany Fears Revolution If The Canadian Movement Europe Scraps Welfare Model 7 The Acropolis: Part II for Monetary Sovereignty: 9 On Hong Kong Shelves, Illicit Dirt on China’s Elite Rise and Fall 10 Hello, COMER “Once a nation parts with the control By the eve of the depression, interest on 13 will Omnibus Bill InfluenceB ank of its currency and credit, it matters not Canada’s public debt had reached an alarm- of Canada’s Independence? who makes the nation’s laws. Usury, once ing one-third of government expenditures; Flaherty Should Explain. in control, will wreck any nation.” – Wil- and many officials believed that the govern- 14 Fantopian Update liam Lyon Mackenzie King, Prime Minister of ment needed a central bank to generate its 17 Letters from COMER Readers Canada, 1935 own money. In 1933, a Royal Commission 18 Certain Television Fare Can Help The government of Canada devised its in- was put together to look into creating such Ease Aggression in Young Children, Study Finds novative system of state-bank-created credit in a bank. A major debate then ensued over the 1930s, and drew freely from it for nearly whether it should be public or private. 19 The Illusion of Growth four decades of unusual prosperity, growth and William Lyon Mackenzie King, elected Publications Mail Agreement No. 41796016 development. Then in the 1970s, Canada prime minister in 1935, thought the bank joined the Basel Committee of G10 countries should be public. He admonished: at the BIS. A change in economic policy fol- “Until the control of the issue of cur- lowed that cut the government off from its rency and credit is restored to government own state bank funding, subjecting it instead and recognized as its most conspicuous and to the skyrocketing interest rates of private sacred responsibility, all talk of the sover- international credit markets. Canada is now eignty of Parliament and of democracy is struggling with debt and deficits along with idle and futile.”2 most of the rest of the Western world. How different times were then. Imagine While Australia’s innovative central bank a Canadian prime minister or US president was being reined in by the City of London saying that today! in the 1930s, Canada’s was just getting started. Before 1935, the Canadian govern- Continued on page 2 ment did not have a central bank. It had to borrow from private banks that issued their own banknotes, with the country’s largest COMER Email Update private bank, the Bank of Montreal, serv- ing as the government’s de facto banker.1 COMER is updating its confidential email But in the throes of the Great Depression, contact list to better inform members and this private system had failed. The money Economic Reform subscribers of relevant, supply had collapsed, forcing businesses to late-breaking news and local events. close and unemployment to soar. The banks Interested parties are encouraged to send were blamed for making conditions worse a message immediately to ”COMER by failing to extend loans; while for the gov- Email Update” [email protected] from ernment, a national debt to private banks their preferred email account. As ever, meant a mounting interest burden. all preferences will be respected. Sovereignty from page 1 It was all going well, says Bolton, until Gerald McGeer and the Model two local banks flooded Guernsey with their of Guernsey own notes to undermine the State Notes. Another zealous advocate for a public The Island responded by agreeing to limit central bank was a Canadian mayor and the issue of its own Notes. But with the out- FOUNDING EDITOR Member of Parliament named Gerald Grat- break of war in 1914, the State Notes were John Hotson 1930–1996 ton McGeer. In The Conquest of Poverty restarted; and they continued to circulate (1936), McGeer wrote: alongside British Pounds Sterling thereafter. PUBLISHER–EDITOR “Ever since the passage of the English Despite that influx of new money, writes William Krehm Bank Act of 1844, the creation, issuance, Bolton, “there has never been inflation, ([email protected]) and the regulation of the circulation of the and the prosperity of the island continues INFORMATION SECRETARY current medium of exchange, though being as it has since 1820, operating on minimal Herb Wiseman duties that constitute the most conspicuous taxation.” ([email protected]) and sacred responsibilities of government, What a Nationalized Central Bank Economic Reform (ER) have been in large measure delegated in (ISSN 1187–080X) is published monthly blind faith and absolute confidence to bank- Can Do by COMER Publications ers and financiers. The Bank of Canada opened in 1935 27 Sherbourne Street North, Suite 1 “The complete collapse of the econom- under private ownership; but in 1938, the Toronto, Ontario M4W 2T3 Canada ic structure under banker management… Bank Act was amended to make it a public- Tel: 416‑924­ -3964, Fax: 416‑466‑5827 proves that the private control of credit is ly-owned institution. According to William Email: [email protected] fundamentally unsound…. Krehm in A Power Unto Itself: The Bank of Website: www.comer.org “Necessity now compels all to recog- Canada, the 1938 nationalization allowed nize that the creation and issuance of the the central bank to create the money to COMER Membership: Annual dues medium of exchange, the monetization of finance federal projects on a nearly interest- (includes ER on request plus 1 book of your choice): CDN$50 public credit, the circulation of the medium free basis. The bank could also lend to the of exchange, and the general supervision of provinces. The interest it collected went Economic Reform Subscription only: the monetary system must be restored to back to the federal treasury.4 One year, 12 monthly issues, in Canada government.” In creating the credit to finance fed- CDN$30, Foreign CDN$40 McGeer made lengthy presentations to eral, provincial, and municipal projects, the the Ottawa Common Banking Committee, Bank of Canada was doing what private Send request and payment to: clarifying for bankers, economists and leg- banks do every day; but it was doing this COMER Publications 27 Sherbourne Street North, Suite 1 islators how well a national currency issued in the public interest. In parliamentary Toronto, ON M4W 2T3 by a publicly-owned bank could work. For hearings in 1939, Graham Towers, the first a model, he cited the British Channel Island governor of the Bank of Canada, confirmed ER Back Issues: CDN/US$4, includes state of Guernsey, which had been issuing that banks routinely create credit with ac- postage; additional copies same its own currency to pay for public works counting entries. When asked by Gerald issue, $2; additional issue same order, since 1820. McGeer whether banks create the medium $3. Send requests for back issues to New Zealand researcher Kerry Bolton of exchange, Towers replied: Herb Wiseman, 69 Village Crescent, Peterborough ON K9J 0A9. summarized the Guernsey experience in an “That is right. That is what they are there August 2011 article like this: for…. That is the banking business, just in Copyright © 2013 “Guernsey’s banking system was prompt- the way that a steel plant makes steel. The COMER Publications ed by dire need, the island being in serious manufacturing process consists of making a All rights reserved financial trouble from the beginning of the pen-and-ink or typewriter entry on a card in 19th Century. Guernsey’s town was un- a book. That is all.”5 Permission to reproduce is granted developed, the roads were cart-tracks, and In another interesting exchange, McGeer if accompanied by: “Copyright © 2013 COMER Publications. there was no prospect for employment…. asked Towers: Reproduced by permission of “[I]t was the need to upgrade the Public “Q: Would you admit that anything COMER Publications” Market that prompted a committee to re- physically possible and desirable can be port back with a solution in 1816 to issue made financially possible? Postmaster, please send address £6000 worth of States Notes. The commit- “A: Certainly. corrections to: tee also recommended that the States Notes “Q: Will you tell me why the govern- COMER Publications be used not only for the new market, but ment with power to create money should 27 Sherbourne Street North, Suite 1 also for Torteval Church, road construction, give that power away to a private monopoly Toronto, Ontario M4W 2T3 and other State expenses. The notes’ issue and then borrow that which Parliament can PRINTING AND DISTRIBUTION was started in 1820, and was followed by create itself, back at interest? Watt Solutions Inc., London other issues, until by 1837 £55,000 of the “A: Now, if Parliament wants to change Notes were in circulation, debt-free and the form of operating the bank system, then Printed in Canada on recycled paper. having created prosperity and development, certainly that is within the power of Parlia- which in turn stimulated visitors to the ment.”6 island.”3 For over three decades, the Bank of Can-

2 | Economic Reform June 2013 www.comer.org ada used its lucrative credit-creating tools cian services. In 1984, the Canada Health Friedman, the phenomenon was blamed for the benefit of the public. The Cana- Act ensured that no medically-necessary on governments either issuing money too dian government funded infrastructure and care would include private fees or a charge freely or borrowing too freely from their social programs simply by advancing the to citizens.9 own central banks. Overlooked was that the credit needed to accomplish them. William stagflation was global, and that Canadian Krehm writes: Bad Economic Policy Kills the prices had remained stable and the national “In the years 1935 to 1945, Canada’s Canadian Golden Goose debt had been low for decades, although the monetary base – that is, the supply of legal From 1939 to 1974, Canada financed Bank of Canada had been steadily increas- tender – was increased from $259 million these projects largely through its govern- ing the monetary base. Paul Hellyer, former to $2,017 million. M1 – all currency and ment-owned central bank, without spark- Defense Minister of Canada and founder non-interest-bearing deposits – rose from ing price inflation or driving up the federal of the Canadian Action Party, maintains $742 million to $2,956 million. Because debt. (See Figure 9 on page 4.) From 1935 that elevated prices in the 1970s were the the central bank created most of the money to 1939, the Bank of Canada issued most of result not of government money creation itself and lent it to the government in the the nation’s credit, and it issued 62 percent but of “cost-push” inflation, triggered by form of treasury bills at rates as low as .37 of the credit during the last years of World big labor unions, big government, and big percent, the bank was able to keep the inter- War II. Until the mid-1970s, the Canadian corporations negotiating top dollar for their est paid on Canada Savings Bonds bought government continued to create enough contracts.13 by the public to 3 percent or less. Without new state money to monetize 20 percent According to William Engdahl in The the low-rate financing provided by the cen- to 30 percent of the national deficit. It Gods of Money (2009), there was another tral banks, the Allied powers could not have advanced money at low interest, forcing cause of cost-push inflation in the early won the war.”7 commercial banks to keep interest rates low 1970s, and this one was intentionally engi- According to the late Will Abram in in order to compete.10 neered: the skyrocketing cost of oil. When Money: The Canadian Experience with the This four-decade run of prosperity came Nixon took the US dollar off the gold Bank of Canada Act of 1934 (2009), the to an end, however, when Canada aban- standard in 1971, the dollar dropped pre- Canadian government first showed what it doned its successful experiment in self- cipitously in international markets. US could do with its own central bank during funding and began borrowing heavily on Secretary of State Henry Kissinger and World War II, when Canada ranked fourth the private market. This change in policies President Nixon then held a clandestine among the Allies for production of war occurred when the Basel Committee was meeting in 1972 with the Shah of Iran, who goods. Under the Returning Veterans Reha- established by the central-bank Governors was offered any weapons he wanted from bilitation Act of 1945, some 54,000 return- of the Group of Ten countries of the Bank the US arsenal except nuclear bombs. He ing vets were given financial aid to attend for International Settlements in 1974, and would need vastly greater income to pay for university. The Department of Veterans Canada joined it.11 A key objective of the them, but the revenue was soon provided. Affairs provided another 80,000 vets with Committee was and is to maintain “mon- Engdahl cites evidence that in 1973, vocational training, and the Veterans’ Land etary and financial stability.” To achieve a group of powerful financiers and politi- Act helped 33,000 vets buy farmland. that goal, the Committee discouraged gov- cians met secretly in Sweden to discuss how After the war, the Industrial Develop- ernments from borrowing from their own the dollar might effectively be “backed” by ment Bank, a subsidiary of the Bank of central banks interest-free and encouraged oil. An arrangement was then finalized in Canada, was formed to boost Canadian them to borrow instead from private credi- which the oil-producing countries of OPEC businesses by offering loans at low inter- tors, including large international banks.12 would sell their oil only in US dollars, and est rates. The Bank of Canada also funded The proffered justification for the policy the dollars would wind up in Wall Street many infrastructure projects and social pro- was that borrowing from a nation’s own and London banks, where they would fund grams directly. Under the Trans-Canada central bank, which had the power to cre- the burgeoning US debt. For the OPEC Highway Act passed in 1949, Canada built ate money on its books, would inflate the countries, the quid pro quo was military the world’s longest road and the world’s lon- money supply and prices, while borrowing protection, along with windfall profits from gest inland waterway (a joint venture with from private creditors would not. Over- a dramatic boost in oil prices. the United States), as well as the 28-mile looked or concealed was that private banks In 1974, according to plan, an oil em- Welland Canal. Senior citizens, regardless create the money they lend just as public bargo caused the price of oil to quadruple, of income or assets, received a modest al- banks do. The difference is that a publicly- forcing countries without sufficient dollar lowance from the government under the owned bank returns the interest to the reserves to borrow from Wall Street and Old Age Security Act; and children under 15 government and the community, while a London banks to buy the oil they needed. got one as well.8 privately-owned bank siphons it into private Increased costs then drove up prices world- In 1957, funding from the Bank of coffers, progressively drawing money out of wide.14 Canada helped launch the Canadian fed- the productive economy. In Demon Money (2013), James Cumes eral health care system. A Hospital Act was The change in government borrowing points to yet another factor driving up pric- passed under which the federal government policies was justified as being necessary to es: the rising cost of money itself. The mon- agreed to pay half its citizens’ bills at most fight “stagflation” – rising prices accom- etarist prescription for combatting price hospitals, and a Diagnostic Services Act gave panied by high unemployment – which inflation was to raise interest rates, making all Canadians free acute hospital care, as had set in during the late 1960s. Under credit more expensive and reducing its sup- well as lab and radiology work. In 1966, the the sway of the classical monetarist theo- ply. That was the theory, but raising interest Hospital Act was expanded to cover physi- ries promoted by US economist Milton rates actually had the opposite effect: prices www.comer.org June 2013 Economic Reform | 3 shortfall in meeting the cost of government Figure 8. US Inflation Rate Tracks Interest Rate, 1948-2012 programs since Confederation. The remain- der, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.”17 Thus in 1993, 91 percent of the debt consisted of six interest charges. Without those charges, the government would have had a debt of only C$37 billion – very low and sustainable, just as it was before 1974. By 2012, the government had paid C$1 trillion in interest – twice its national debt.18 Interest on the debt is now the government’s single largest budget expenditure – larger than health care, senior entitlements or na- tional defense.19 Today, the Bank of Canada monetizes only 7.5 percent of the state deficit. The Canadian money supply increases by C$22 billion annually, but the Bank of Canada creates less than 2 percent of that increase. If the Canadian government had continued rose. (See Figure 8.) US Federal Reserve to 20 percent, and Cana- to fund itself as it had before the mid-1970s, President Richard Nixon began raising dian rates went as high as 22 percent. At 20 estimates are that Canada would now be interest rates proactively in 1969, before percent compounded annually, debt doubles operating with a surplus of C$13 billion.20 prices had really begun to rise. They were in less than four years. (See Figure 9.) In March 2012, the Canadian House of just expected to rise due to the Vietnam War Commons passed the federal government’s and other large government expenditures.15 From Sustainable to latest round of budget cuts and austerity Interest rates rose steadily thereafter, peak- Unsustainable Debt measures, including cutting 19,200 public ing in Canada at a staggering 22 percent The Canadian Auditor General is the sector jobs, slashing federal programs by in 1981. Prices rose right along with them. accountant who reviews the government’s C$5.2 billion per year, and raising the retire- The reason is not hard to see: businesses books. In his 1993 annual report he ac- ment age for millions of Canadians from 65 have to recoup their interest charges by rais- knowledged that most of the government’s to 67. The justification for these austerity ing their prices; and businesses that cannot debt consisted of interest charges: measures was a massive federal debt exceed- afford to borrow at the higher rates decrease “[The] cost of borrowing and its com- ing C$ 581 billion, or 84 percent of GDP. production, reducing supply relative to de- pounding effect have a significant impact on It is a debt that might have been avoided if mand, driving prices up.16 Canada’s annual deficits. From Confedera- the government had continued to borrow The debt curve that began its exponen- tion up to 1991-92, the federal government heavily from its own central bank, as it did tial rise in 1974 tilted toward the vertical in accumulated a net debt of $423 billion. Of between 1939 and 1974. 1981, when interest rates were raised by the this, $37 billion represents the accumulated Taking It to Court Figure 9. Canadian Federal Debt, 1867-2008 In December 2011, William Krehm, along with Ann Emmett and COMER, brought suit in Canadian federal court “to restore the use of the Bank of Canada to its original purpose, including making interest- free loans to municipal/provincial/federal governments for ‘human capital’ expendi- tures (education, health, other social ser- vices) and/or infrastructure expenditures.” According to a press release: “The Plaintiffs state that since 1974 there has been a gradual but sure slide into the re- ality that the Bank of Canada and Canada’s monetary and financial policy are dictated by private foreign banks and financial in- terests contrary to the Bank of Canada Act. “The Plaintiffs state that the Bank of In- ternational Settlements (BIS), the Financial Source: Statistics Canada, CANSIM using CHASS, v151537 Canada 21 Stability Forum (FSF) and the International

4 | Economic Reform June 2013 www.comer.org Monetary Fund (IMF) were all created with the cognizant intent of keeping poorer na- tions in their place which has now expanded From Austerity to Prosperity to all nations in that these financial institu- tions largely succeed in over-riding governments Through Proper Use of Our and constitutional orders in countries such as Canada over which they exert financial con- Publicly Owned Bank of Canada trol. The Plaintiffs state that the meetings of the BIS and Financial Stability Board (FSB) By Paul Hellyer every hundred understands what money is (successor of FSF), their minutes, their dis- Canada needs tens of billions to meet our and where it comes from. Graham Towers, cussions and deliberations are secret and not essential needs. the first and arguably the brightest of our available nor accountable to Parliament, the • To provide jobs for the more than one Bank of Canada governors said, “Money is executive, nor the Canadian public notwith- million young Canadians becoming frus- just a book entry. That’s all it is.” If he were standing that the Bank of Canada policies trated by the lack of opportunity to contrib- alive today he would say, “Money is just a directly emanate from these meetings. These ute to a stronger and more vibrant Canada. computer entry. That’s all it is.” So there organizations are essentially private, foreign • To replace a rapidly decaying infra- are millions of unemployed people simply entities controlling Canada’s banking system structure and to build new state of the for the lack of a few well-placed computer and socio-economic policies.” art urban transportation systems, roads, entries. This is a crime against humanity in The story of the secretive foreign influ- hospitals, etc. the literal sense of the word. ence of the BIS and the Financial Stability • For financial relief to an over-stressed But there is a catch. It makes all the Board will be picked up later. First we’ll look Medicare system desperately in need of a difference in the world who owns the com- at another Canadian public banking in- cash transfusion. puter. If it belongs to the government it novation in the 1930s, the Alberta Treasury • To guarantee adequate research and will produce government-created, debt free Branches. development to increase our ability to com- money (GCM) which can be spent into cir- pete in global markets. culation to meet the legitimate needs of the Endnotes • To make post-secondary education citizens. The GCM is legal tender and will 1. “Bank of Canada,” Wikipedia. available to poor and rich alike. remain in the system forever. 2. Mackenzie King, quoted in “Of Primary Concern to Every • To finance the measures necessary to If, on the other hand, money is created Canadian,” Independent Party Canada, 21 June 2012, inde- pendentpartycanada.com. arrest global warming before it is too late. by the computers of privately-owned banks 3. Kerry Bolton, “Breaking the Bondage of Interest: A Right The federal government and parlia- it is just virtual money. It is a commonly Answer to Usury, Part 3,” Counter-Current, 14 Aug. 2011. ment have all the power necessary to create believed myth that the money a bank lends 4. William Krehm, A Power Unto Itself: The Bank of Canada (Stoddart Publishing Company 1993), page 3. enough money to meet all the above and you today is money someone else had de- 5. William Krehm, “A Monetary Education for MPs,” Eco- more. A pro-active Bank of Canada helped posited yesterday. But the odds of that being nomic Reform, May 2008. finance all of our great post-World War II true are infinitesimal. It is newly created 6. Krehm, A Power Unto Itself, op. cit., page 57. projects and can meet our current critical money – virtual money. 7. Krehm, ibid., pages 56-57. needs if we have the vision to think outside The system works this way. Suppose 8. Will Abram, “Money: The Canadian Experience with the Bank of Canada Act of 1934,” 9 Aug 2009. the box. that you want to borrow $35,000 to buy a 9. J. Gilbert Turner, “The Hospital Insurance and Diagnostic The Canadian Constitution gives Ot- new car. You visit your friendly banker and Services Act: Its Impact on Hospital Administration,” Cana- tawa exclusive power over money, banking ask for a loan. He or she will ask you for dian Medical Association Journal 78.10 (CMAJ, 1958). ncbi. nlm.nih.gov; Donna Wilson, “Principles of the 1984 Canada and paper currency. So it can create all the collateral – some stocks, bonds, a second Health Act,” (University of Wollongong, 2000), uow.edu.au. money it needs for all legitimate purposes. mortgage on your house or cottage or, 10. Bolton, op. cit. It does not have to borrow in the market if you are unable to supply any of these, 11. “History of the Basel Committee and Its Membership,” and put Canadians deeply in debt in the the co-signature of a well-to-do friend or Bank For International Settlements, 21 June 2012, bis.org. 12. Ibid. process! Yet that is exactly what it has done relative. When the collateral requirement is 13. Paul Hellyer, “Economics for Boomers.” Roads Less Trav- by abdicating its power in favour of the satisfied you will be asked to sign a note for elled, 3 Mar. 2007, pipalya.com. privately-owned banks, beginning in 1974. the principal amount with an agreed rate 14. William Engdahl, The Gods of Money (edition.engdahl The unhappy result has been an increase of interest. 2009) Pages 265-273. 15. “Nixon and Domestic Issues,” AP U.S. History Topic in net federal debt from $24 billion in 1973 When the paperwork is complete, and Outlines. to about $600 billion today. That has cost the note signed, your banker will make an 16. James Cumes, The Demon Money (kindle edition: Amazon. taxpayers more than $1 trillion, 100 billion entry on the bank’s computer and, presto, a com: Books. 1 Jan. 2013). in interest so far, and all of it unnecessary. $35,000 credit will appear in your account 17. Ron Thompson and Jeff Greenberg, “1993 Report of the Auditor General of Canada,” Office of the Auditor General of If we stick with the present orthodoxy of which you can use to buy your car. The Canada, 1993, oag-bvg.gc.ca. austerity, and servitude to private banks, important point is that seconds earlier that 18. Adam Taylor, “Til’ Debt DoU.S.Part? – With a Plan Ot- the horrendous first charge on our incomes money did not exist. It was created out of tawa’s Debt Can Be Eliminated,” Enter Stage Right, 23 Oct. 2006, enterstageright.com, confirmed by Hon. Paul Hellyer will never end and we will be slaves of the thin air – so to speak. from official sources, April 2012. financiers forever. At some point, however, you have to pay 19. Ibid. off your note and any interest owing. And 20. Kerry Bolton, “Breaking the Bondage of Interest: A Right The Money Mystique not only you but everyone else who has Answer to Usury, Part 4,” Counter-Current, 10 Aug. 2011. 21. “Gross Canadian Federal Debt, 1867-2008,” 24 Apr. 2010, Our current servitude is a direct result borrowed “money” from banks – including pomiec.blogspot.com. of the fact that only about one person in governments. Anyone who defaults is in big www.comer.org June 2013 Economic Reform | 5 trouble. Individuals who default will have system crashes and thousands or sometimes predict that the slump will continue for the assets they pledged as collateral seized millions of innocent people lose their jobs, several more years. And that certainly will by the bank. A government that is in danger homes, farms and businesses. Almost any be the case if there is no alternative to bank- of defaulting, will be forced to borrow from high school student should be able to see created money (BCM). We are drowning the International Monetary Fund, which that any monetary system based on debt cre- in debt and must have a massive injection will then tell that government how to run ation is totally insane. The total world debt, of GCM to dilute it and get the economy its affairs including cutting back on services mathematically, is always tending toward up and running without further delay. and selling off public assets to the interna- infinity – and there is no possible way of There is so much to be done that can’t be tional vulture capitalists. paying it off. The real money (legal tender) done without money which is the gasoline A world system where all the money to do so doesn’t exist. And the real economy of the economic engine. To paraphrase a is created as debt is a perpetual disaster in that depends on cash to grow shifts into low famous statement by Prime Minister Win- the making. It is like a giant balloon that gear whenever the supply of credit money ston Churchill during World War II, “Pass the banks pump full of debt. The balloon dries up. the ammunition (money) and we will get gets larger and larger until the debt load And that’s where we are today and have on with the job.” becomes too heavy to carry, and then it is been since Wall Street crashed the system Our group has presented the federal gov- like a balloon with a pin stuck in it. The in 2007-2008. Worse, many economists ernment with a manifesto entitled “A Social Germany Fears Revolution If Europe Scraps Welfare Model By Ingrid Melander and Nicholas Vinocur, bilateral deals with Spain and Portugal. must be pragmatic and work on various Reuters “We have to rescue an entire genera- strands. Schaeuble said this was why Ger- Paris – German Finance Minister Wolf- tion of young people who are scared. We many had also decided to strike deals with gang Schaeuble warned on Tuesday that have the best-educated generation and we countries such as Spain and Greece. failure to win the battle against youth un- are putting them on hold. This is not ac- “Let’s be honest. There is no quick fix. employment could tear Europe apart, and ceptable,” Italian Labour Minister Enrico There is no grand plan,” said Werner Hoyer, dropping the continent’s welfare model in Giovannini said. head the European Investment Bank. favor of tougher US standards would spark Rajoy said both the European Invest- German ministers said Europe must a revolution. ment Bank and European Central Bank continue on the path of structural reforms Germany, along with France, Spain and should do more to help credit flow to small to boost its competitiveness as well as make Italy, backed urgent action to rescue a gener- firms. good use of available EU funds, including 6 ation of young Europeans who fear they will Small and medium-sized companies in billion euros that leaders have set aside for not find jobs, with youth unemployment in Spain and much of southern Europe pay youth employment for 2014-20. the EU standing at nearly one in four, more much higher rates for loans than their coun- The youth employment crisis will be a than twice the adult rate. terparts in the north. Youth unemployment central theme of a June EU leaders’ summit, “We need to be more successful in our in Spain is above 57 percent as layoffs con- and German Chancellor Angela Merkel has fight against youth unemployment, oth- tinue in a deep recession. invited EU labour ministers to a conference erwise we will lose the battle for Europe’s “With all respect for its independence, I in Berlin on July 3. unity,” Germany’s Schaeuble said. believe the ECB can and should do more,” In March 2013, nearly 40 percent of un- While Germany insists on the impor- Rajoy said in a speech at the end of the der-25-year-olds in Portugal were jobless, tance of budget consolidation, Schaeuble conference, also saying funds channeled to and in Greece youth unemployment shot to spoke of the need to preserve Europe’s wel- small firms via the EIB should be boosted to a record 64 percent in February, while it was fare model. 30 billion euros ($38 billion) a year. below 8 percent for Germany and Austria. If US welfare standards were introduced He called for “some kind of common Eu- Following up on an idea aired earlier this in Europe, “we would have revolution, ropean debt” and said Europe should tem- month, French President François Hollande not tomorrow, but on the very same day,” porarily exclude social security subsidies for urged the euro zone to work towards a joint Schaeuble told a conference in Paris. youth hiring from its calculation of member economic government with its own budget Prime Minister Mariano Rajoy of Spain, states’ budget deficits, a proposal that will that could take on specific projects includ- where youth unemployment is among the likely meet resistance. ing tackling youth unemployment. highest in Europe, called for the euro zone German ECB board member Joerg As- ❧ ❧ ❧ to triple aid to small businesses and al- mussen said on Monday it would be a low governments to subsidize the hiring mistake to “tinker with the growth pact” to Our Comment. What is being slipped of younger workers without sanctions for ignore certain investments for budget deficit by in semi-guilty stealth is the crucial invest- overspending. calculations, as favored by some in the EU ment in human capital. This results in tick- In recent weeks Germany, wary of a back- who want public investment excluded to ing off human capital investment as a mere lash as many in crisis-hit European countries help them meet fiscal targets. luxury part-time that society cannot afford. blame it for austerity, has taken steps to Aside from Rajoy’s proposals, ministers It is in fact the most crucial investment that tackle unemployment in the bloc, striking offered few concrete plans, insisting Europe society cannot afford to miss making. W.K.

6 | Economic Reform June 2013 www.comer.org Contract Between the Government and money and currency needed to satisfy the conspicuous and sacred responsibility, all People of Canada.” It sets out the steps to be spending power of the government and the talk of the sovereignty of Parliament and of taken to reform the system from the ground buying power of the consumers.” democracy is idle and futile.” up. This includes the creation of enough Baron Josiah Stamp: Thomas Jefferson: debt free money (about $150 billion a year “Banking was conceived in iniquity and “I believe our banking institutions are for seven years) to meet all the legitimate was born in sin. The Bankers own the earth. more dangerous to our liberties than stand- needs at the federal, provincial and mu- Take it away from them, but leave them the ing armies. If the American people ever nicipal levels of government. (Details can be power to create money, and with the flick of allow private banks to control the issue of found at www.victoryfortheworld.net.) the pen they will create enough money to their currency, first by inflation and then Henry Ford Sr. said that, “If the peo- buy it back again. However, take that power by deflation, the banks and the corpora- ple understood the monetary system there away from them and all the great fortunes tions that will grow up around them will would be a revolution before morning.” So like mine will disappear, and they ought to deprive the people of all property until their do your homework and join the revolution disappear, for this would be a happier and children wake up homeless on the continent (peaceful). You have nothing to lose except better world to live in. But if you wish to their fathers conquered.” your bondage to the moneylenders. remain the slaves of Bankers, and pay the When are our leaders going to “get it?” cost of your own slavery, let them continue Write to the Prime Minister, Finance These Men Were Not Stupid Men to create money.” Minister Flaherty, and your MP at: Abraham Lincoln: W.L. Mackenzie King: House of Commons “The ‘money power’ preys upon the na- “Once a nation parts with control of Ottawa, ON K1A 0A6 tion in times of peace, and conspires against its currency and credit, it matters not who Demand that the government adopt and it in times of war. It denounces as public makes the nation’s laws. Usury, once in implement “A Social Contract Between the enemies all who question its methods or control, will wreck any nation. Until the Government and People of Canada” before throw light on its crimes. The government control of currency and credit is restored Parliament adjourns for the summer! should create, issue and circulate all the to government and recognized as its most (Text at www.victoryfortheworld.net.)

The Acropolis: Part II

An excerpt from The Acropolis by Katerina owed nothing to the hand of man. over time. In the Mycenaean period, a nar- Servi, published by Ekdotike Athenon. In About thirty years after the Persian war, row path, starting from the South of the French, translated by William Krehm. things changed. Pericles, wished to make rock, ascending the western slope to reach The term acropolis, a work composed of Athens the brightest city of all Greece, con- the fortified entrance to the Acropolis. the akra-point culminant – and of substan- ceived a plan of urbanization, studied in Later, at the time when the festival of the tive “polis” – ville, cite – is designed to the detail to which the Athenians gave their Panathenaic games was reorganized (in 566 highest point of the city fortified. In the re- agreement. This plan also included the ma- BC) they arranged a broad inclined plan, gions of Greece since the prehistoric period. jor reference work on the Acropolis. It is to adapted to the rise of the great procession The Acropolis of Athens was then in effect, the great sculptor Phidias, very close friend on the sacred rock. With its 80 meters long only a single such fortress. But in the course of Pericles, that returned the direction of and 10 wide, it started from the bottom of of the years its role changes. It becomes work. In his Life of Pericles, the Greek writer the Acropolis, the west, and rode straight to little by little the most important religious Plutarch (50-120 AD) called him the “Su- the entrance of the sanctuary. During the and cultural centre of the city to reunite a perintendent of works.” However, he was construction of the Panathenaia the archaic number of masterpieces of the architecture not alone. ramp was extended, occupying the entire and sculptures of antiquity. At his side were the architects, artists and space between the two wings of the new Two historical periods deeply imprinted artisans the brightest and the most famous building. their mark on the sacred rock the archa- of their time a bunch of men who, in a few ic epoch and classical epoch. The archaic years, drew up and established buildings of The Main Entrance to the Sanctuary: Acropolis was completely sacked by the a unique size and beauty. Pericles, the man The Propylon Persians in 480 BC. After which, according who had wanted to make Athens a power- From the Mycenaean period, the main to tradition, shortly before the Battle of Pla- ful, democratic, grandiose city, died during entrance to the Acropolis was on the west taea in 479 BC, the Greeks made a solemn the terrible plague epidemic which struck side of the rock, near the place where the promise to leave their sanctuaries in ruins to the city in 429 BC. The reconstruction plan Propylaea stood. A first monumental gate in never forget the barbarity of the Persian in- of the Acropolis, however, continued after poros, of the elementary plan, was believed vader. So, when the Athenians came home, his death. to be erected in this location at the middle of victors this time, they did not raise the ruins the 6th century BC. Between 510 and 480 of their temples. Only the “old temple” Access to the Sacred Rock BC, a second marble propylon is substituted Athens, the Acropolis, was restored to shel- Historically, the main access to the sum- on the first and was likely destroyed by the ter the xoanon of the goddess there, statue mit of the sacred rock became the western Persians (in 480 BC), and restored or rebuilt of antiquity, that the Athenians considered slope of the Acropolis, the less steep of all. within the framework of defensive works “sent from heaven.” That implied. worship Of course, its configuration has changed which saw the day after the Persian wars. www.comer.org June 2013 Economic Reform | 7 The Propylaea The Agrippa Pillar mer Mycenaean bastion is wrapped in an The imposing Propylaea¹ from the time In front of the Pinacoteca stands, even envelope in poros: built out of isodomic de- of Pericles stood on the site of the previous today, a high marble pillar of gray-blue vice, these walls extend the terrace on which propylon, part of a lot simpler plan. The Hymettus. It was capped with a bronze the new temple is built. Entirely made of work, which began in 437, interrupted in quadriga dedicated to Eumene II, after the marble, in contrast to the bastion, it is an 432 BC, this interruption was attributed victory of the king of Pergame in the pana- amphiprostyle temple (which introduces to the impending war of the Peloponnese, thenaic games, in 178 BC. At the end of 1st a colonnade only on its small sides): four but this was probably not the only reason. century AD, the monument was devoted ionic columns on the front and rear facade While the initial plan was never carried to to a Roman, Marcus Vipsanius Agrippa, and in the back supervise a baby cella (or completion, the Propylaea of Pericles had to known for his generosity towards the city. secos) which, contrary to usage, is not pre- compete with the Parthenon. The architect ceded by a pronaos, but with the side walls Mnesicles demonstrated engineering genius The Beule Gate ending with antes, between which two slim to solve the problems posed by limited space After the destruction of Athens by Her- pillars stand. In ancient times, everything and the slope of the ground. The building cules, in 267 AD, the Athenians undertook was closed by gates, preventing access to the that he designed, majestic, harmonious, en- to rebuild the fortifications of the Acropolis, interior of the cella. tirely made of white marble from Pentelic, especially on its western slope, where it was The sculptural decoration of the temple is an ideal introduction to the architectural left without protection. Using as building is of particular interest. The precious frieze creations of the sanctuary. materials of the architectural elements com- decorated with bas-reliefs is divided to- The Propylaea complex consists of a cen- ing from former buildings, primarily of the day between the British Museum and the tral body flanked by two wings, north-west monument choregic of Nikias which was Acropolis Museum. An assembly of the and south-west. The central body has six drawn up on the Southern slope of the rock, Olympian gods occupies the east facade, Doric columns in facade, at equal distances they built a gate, flanked of two bastions, while the other three sides depict scenes of from one another, with the exception of exactly below Propylaea: the Beule gate, battles: battles against the Persians on the two central columns separated by more in- named for the French archaeologist who ex- south side and battles between Greeks on tercolumniation. This wider opening would humed it in the middle of the 19th century. the north and west sides. The pediments facilitate the passage of riders and animals in were decorated with scenes in high relief: the Panathenaic procession. Perpendicular The Temple of Athena Nike probably Amazonomachie (mythical combat to this Doric facade are two rows of three To the south-west of the Propylaea, a between Athenians and Amazons) in the fine ionic columns. defensive bation from Mycenaean time was west and Gigantomachie (fight between the A partition wall pierced with five doors restored in the classical era, stands the el- gods and the Giants) in the east. divides the central body in two parts, that egant little temple where the Athenians wor- For the safety of the faithful, the bastion of the back being at a higher level. The dif- shiped Athena equated with Nike, since she of the small temple was surrounded on three ference in elevation between the two parts assisted them in their struggle and brought sides by a marble balustrade. The parapet of the central body is affected in terms of them victory. The temple which one sees plates are decorated on their exterior clad- coverage, differences in height between the today succeeds several older places of wor- ding, with beautiful reliefs depicting winged roofs, including the Interior, painted in dark ship, also dedicated to Athena Nike. The victories in the presence of the seated god- blue, was decorated with gold metal star. researchers estimate that in the middle of dess Athena, wearing his helmet and leaning The rear facade of the central building also the 6th century BC approximately at this on his shield, bustle about them, some to presents a row of six Doric columns. same site a small wooden temple rose, but decorate trophies, the others to carry out the The north-west wing has a small portico was destroyed in 480 BC, at the time of oxen sacrifice. opening by three fine Doric columns on a the Persian invasion. It is also dates back to The temple that sheltered a wooden room known as the Pinacoteca, due to infor- the middle of the 6th century a foundation religious statue (xoanon) of Athena Nike, mation given by Pausanias. When Periegetes hollowed out in its centre in which they carrying a helmet in the left hand and a gre- visited in the 2nd century BC, paintings offered to see an eschara, pit intended for nade in the other. Because Pausanias (2nd and/or frescoes decorated the walls. The chthonic sacrifices, but that appears rather century AD) believed it dedicated to Nike, south-west wing was not an exact replica of as the foundation of the xoanon or wooden the winged goddess of victory, in his Perieg- the north-west wing: his plan is explained religious statue of Athena. Following the esis, cites the monument known as “temple by the desire to respect a large section of the victory of Cimon over the Persians, in 468/7 of wingless victory,” that is to say without Mycenaean wall whose remains are preserved BC, the destroyed small antiquated temple wings, and he adds that the Athenians had even today, and the presence of the sanctuary of wood, was replaced by another in poros, deprived the statue of wings in order to of Athena Nike. It consists of a porch, the including the base of the pertaining to wor- avoid the victory flying away from their city. facade of which parallels that of the north ship statue of Athena on whom was replaced wing, but that does not open on a room. the xonaon of the goddess. A little later, the The Sanctuary of Aphrodite Experts believe that the architect of the bastion and the temple devoted to Athena Pandemos Propylaea had provided in his original plan, Nike were entirely refitted. The construc- The location of the sanctuary of Aph- construction on the east side, spaces similar tion of the new temple was entrusted to the rodite Pandemos, protector of the people, to west coast, but they never saw the day. architect Callicrates in 449/8 BC, but it was near the stronghold of the temple of Athena (The term propylon is used to denote the not accomplished until much later, by about Nike. Pausanias reports that it housed stat- monumental device erected at the entrance 425 BC. ues executed by great artists. He was in the of a place, sacred or not, or a building.) In this remodeling of the place, the for- midst of other very old sanctuaries. The two

8 | Economic Reform June 2013 www.comer.org still visible niches in the western face of the in poros was constructed around 570 BC. of this new temple, to which the first exca- bastion of the temple of Athena Nike had It identifies the famous “Hecatompedon” vators gave the name of “Preparthenon” was undoubtedly a religious character. temple attic one hundred feet in length, already well advanced, arriving at a height mentioned in various inscriptions. It was of the first drums of the colonnade, when Ancient Parthenons at this temple that one attributed the great Acropolis was destroyed by the Persians (in Because they attributed a sacred char- sculptures and the architectonic members 480 BC). After the end of the second large acter to specific places, the Greeks were in poros, unearthed at the end of the 19th campaign of the Persians against Greece, accustomed to build their temples on the century, at the top of the Acropolis. the Athenians used architectonic members same locations as their predecessors. Re- After the battle of Marathon (in 490 of the Preparthenon to construct the north search shows that at the place where later the BC), a marble temple was established on the wall of the Acropolis. Others were later Parthenon would rise, a large Doric temple site of the temple in poros. The construction reused in the beautiful classic Parthenon.n

On Hong Kong Shelves, Illicit Dirt on China’s Elite

By Chris Buckley, The New York Times, armloads of exposés. He asked that his magazine from Hong Kong into China in May 19, 2013 name not be used, fearing punishment. March when a customs officer inspected Hong Kong – Visitors from mainland “It’s impossible to stop everything getting his luggage. The magazine, Boxun, had a China climb the narrow stairs to a cramped through.” report about court officials in his hometown room here filled with forbidden delights: They contain accounts of every conceiv- who are suspected of being corrupt that he shelves of scandal-packed exposés about able scandal of the past. Then there are the wanted to share with friends. their Communist Party masters. gloomy prophecies about China’s future. “He took one look at the magazine and The People’s Recreation Community One book foretells a war with Japan in said, ‘These are reactionary publications, bookstore and several others on Hong 2014, another a toppling of the current they’re illegal,’” Mr. Zhou said. The officer Kong’s teeming shopping streets specialize leadership that same year. The strongest sell- seized the magazines, took down his person- in selling books and magazines banned by er among these feverish jeremiads, “2014: al details and warned him not to smuggle the Chinese government, mostly for their The Great Collapse,” says the fall of the again. “That didn’t matter,” Mr. Zhou said. luridly damning accounts of party leaders, Communist Party is assured, citing what it “I came back and tried again a couple of past and present. And at a time when many says are secret party documents. “This is not days later and brought in 93 copies without Chinese citizens smolder with distrust of gossip or soothsaying,” the preface declares. a problem.” their leaders, business is thriving. “Some people take these books very seri- A former British colony, Hong Kong “We come here to buy books that we ously, I had a phone call just yesterday for became a self-administered region of China can’t read in China,” said Huang Tao, a 20 copies of this book. He seemed to be a in 1997, and despite pressures from Bei- salesman of nutritional supplements from Chinese businessman,” said Paul Tang, the jing, remains free of state censorship. In southeast China, who picked out a muck- proprietor of the store, which in Chinese 2012, Hong Kong hosted 34.9 million visits raking volume recently about corruption goes by the more ironic name of the People’s by Chinese nationals, many on shopping among senior party leaders. “There are so Commune bookstore. sprees. many things that we’ve been deceived over,” “Right now, more than 90 per-cent of Chinese customs officials often confis- he said, waving toward books on the dev- our sales come from mainland visitors,” said cate publications about forbidden themes. astating famine of the late 1950s and early Mr. Tang, 38, who formerly worked for fast But prosecutions of caught travelers are 1960s, an episode that official histories have food chains. He and three partners opened virtually unheard of these days, because the muffled in euphemisms. “We can’t learn the the store in 2002 and two years later shifted government would have difficulty explain- truth, so black becomes white and white its focus to banned books for visitors from ing its secretive censorship practices, even becomes black.” mainland China. “The most frequently before tame, party-run courts, said Bao Pu, Such publications smuggle corrosive asked question is not about the content of the head of New Century Press, a Hong facts and rumors into the bloodstream of books,” Mr. Tang said. “It’s how they can get Kong publisher of many books by ousted Chinese political life. The contraband flow the books back to China.” and retired Chinese officials. is reinforced by a flow of online publications That game of hide and seek takes place “They can never openly justify their and downloadable pirate copies. The trade daily, as Chinese travelers return from Hong rules, because there’s no public list of banned shows the thirst for information in a society Kong and other destinations, sometimes books and these people make their own ar- gripped by censorship, and the difficulties with contraband. Customs officers are bitrary decisions,” said Mr. Bao, the son of and party authorities face in trying to stifle sometimes instructed to stop particular a purged Chinese official. “There would that thirst, especially when, people in the titles, people in the trade say, but often any- simply be too many people to prosecute; business say, officials are among the avid thing with a political edge that is discovered there would be a backlash.” readers of banned books. is scrutinized, and decisions on what to The illicit flow includes memoirs and “These books are playing a big role in confiscate are made on the fly. studies of events and people that the Com- raising the consciousness of the Chinese Zhou Qicai, a businessman from north- munist Party would rather forget, like the people,” said a Beijing journalist who visits east China, was lugging a suitcase stuffed Great Leap famine and brutal Cultural Hong Kong several times a year and buys with 400 copies of a Chinese-language Revolution under Mao Zedong, and the www.comer.org June 2013 Economic Reform | 9 upheavals that culminated in the crack- down in Tiananmen Square in June 1989. Former officials whose memoirs cannot be Hello, COMER published in China, among them the late ousted party leader Zhao Ziyang, often turn By Deryl Zeleny $43 Trillion Federal RICO Mortgage to Hong Kong for an outlet. From what I gather, the IMF plan for a Fraud Lawsuit Filed Then there are the magazines and books 100% asset-based currency is moving for- On October 25, 2012, a 912 page RICO offering salacious accounts of party officials’ ward and could be implemented as fast as lawsuit was filed in New York District Court private lives. Few members of China’s politi- the 1st of December 2012. A meeting was by Spire Law Group, LLC. This lawsuit cal elite escape having a book, or at least a held at the EU this weekend and the western includes hundreds of plaintiffs who are chapter, devoted to their suspected plots, Central Banks were put in their place. The calling to task the knowing and malicious mistresses or ill-gotten fortunes. BRICS nations have recapitalized with gold attempts by a large number of corporate, Some of the hastily written potboil- and have positioned themselves much better banking, and government entities working ers appear fanciful, even by the generous than the corrupt western banking system. in tandem to instigate a nationwide mort- standards that China has recently set, with The Global Reset is around the corner. gage foreclosure crisis for huge financial a real-live scandal involving a Politburo There is scuttlebutt that this angle of profits. This lawsuit is an attempt by the member, Bo Xilai, who fell from power after affairs regarding the actions being taken by plaintiffs to return $43 trillion to the United his wife, Gu Kailai was arrested on charges the IMF may in fact be tied to the release States Treasury. The lawsuit is also calling of murdering a British businessman. of certain funds in the global collateral ac- for a full and complete audit of the Federal “It’s like when your National Enquirer counts. The funds in question, which are Reserve Bank. A copy of this law suit was becomes your only form of political discus- said to total $27.5 trillion, have been re- sent to you and Rocco Galati also. Included sion,” said Geremie Barmé a professor at the ferred to as the Wanta-Reagan-Mitterand as defendants in this case are an entire slew Australian National University in Canberra Protocols. Former intelligence operative Leo of bankers, corporate CEOs and high rank- who studies Chinese culture and politics. Wanta is said to be one of the figures push- ing political officials, including the United “This is a tragedy that the party has gener- ing for these actions. However, based upon States of America (corporation), the State of ated for itself. Its processes are all cloaked information provided earlier in this report, New York, Attorney General Eric Holder, from the public.” Leo Wanta was himself tasked with desta- Treasury Secretary Timothy Geithner, and, Yet many readers of banned publications bilizing the Russian ruble as part of Project perhaps most importantly of all, Senior from Hong Kong are themselves Chinese Hammer. The main objective of Project White House Advisor Valerie Jarrett, who is officials, often eager for gossip that can help Hammer was, again, the hostile corporate a long-standing advisor to President Obama them navigate treacherous political shoals. takeover of the former Soviet Union, and and provides a key link to a great many of The books and magazines are surviving the appeared to be funded by 73,000 metric Obama’s connections to the Chicago un- onslaught of online material in part because tonnes of gold stolen by the Bush family derworld. Petitions from all 50 states have so many of their readers are officials who crime syndicate from Malacanang Palace been signed on the US Government web fear using the Internet to look at forbidden in the Philippines upon the removal of site to peacefully secede from the Union, material or lack of skill to thwart censorship, Ferdinand Marcos from power. Whether or a move that is now growing momentum. said Mr. Tang. not this has anything to do with the actions https://petitions.whitehouse.gov/petition/ “You don’t have to read the People’s Dai- currently being taken by the IMF remains peacefully-grant-state-texas-withdraw-unit- ly, because that won’t tell you what’s really a mystery. ed-states-america-and-create-its-own-new- going on, but you have to read these,” said What this report indicates is that Lagarde government/BmdWCP8B Ho Pin, an exiled Chinese journalist who may have initially compiled this list as a The link below takes you to the peti- runs Mirror Books, a company based in means of eventually exposing these people. tion on the US Government site which New York that publishes muckraking books The fact that these billions of dollars in seeks to dissolve the illegal “United States and magazines in Chinese. Chinese officials funds were hidden in Swiss bank accounts is Corporation” and restore the legal organic visiting Hong Kong often buy them as gifts not shocking, as Switzerland itself has been US government and re-institute the con- for fellow officials, he said. “In the past, anything but neutral for a great many years, stitution. https://petitions.whitehouse. you’d give a mayor a bottle of liquor. But and that Swiss banks such as the UBS, the gov/petition/we-people-now-re-declare- that’s nothing these days, and so is a carton BIS and branches of the HSBC have been 2012%E2%80%A6-declaration-inde- of cigarettes,” Mr. Ho said. “But if you give at the center of this financial tyranny for pendence/0mtlLrYl?utm_source=wh. him one of our books or magazines, he’ll be decades. gov&utm_medium=shorturl&utm_ very happy.” As stated earlier, the aforementioned campaign=shorturl ❧ ❧ ❧ “Monaco 57” event was purportedly at- A month ago I passed the law suit on tended by finance ministers from 57 na- to the Pete Santilli Show in California. He Our Comment. This helps bring us to tions, so it should not come as a surprise ran the story on his radio program and then the great and still growing question: “Is that finances ministers themselves (La- posted it on his website. Kevin Krim Senior there a single regime on the globe these garde, Papaconstantinou, and Venizelos) Vice President for CNBC unknowingly days that can be judged heathfully thriving? would possibly be behind the compiling picked up the article and published it on the And shouldn’t we be increasingly concerned of this information as a means of exposing CNBC’s digital media site. Unfortunately about the deepening threat to humanity’s corrupt CEOs, bankers, and government the young children of Kevin Krim, a former survival? W.K. officials for tax evasion. Yahoo executive and JP Morgan employee,

10 | Economic Reform June 2013 www.comer.org were brutally murdered. This event followed and have denounced Israel for doing 911 democratically elected Prime Minister immediately in the wake of Krim having what they are. It is preposterous to claim George Papandreou forced out of office in leaked the story of the $43 trillion Spire that Iran is attacking US banks. The Ira- November of 2011 and replaced by an Law Group racketeering lawsuit against nian President has said his country will be unelected Conservative technocrat, Lu- top CEOs, bankers, and US government free from an unprovoked attack as soon as cas Papademos, most were unaware of the officials. The story was pulled from the America’s debts collapse the economy mak- bigger picture of what was happening all web site that very day. The accused nanny ing the US incapable of bombing Iran. Iran around them. remains in hospital under a doctor’s induced does not need a computer virus to sink the Similarly, most of us in the United States coma, unable to tell authorities what really US banks. The US is engaged in such mas- were equally as ignorant when, in 2008, transpired. sive fraud that investors might soon pull despite the switchboards at the US Capitol their money from American stock and bond collapsing under the volume of phone calls Hurricane Sandy and Wall Street markets as well as their banks. from constituents urging a “no” vote, our The vault of the Depository Trust & The only persons who would benefit elected representatives voted “yes” at the Clearing Corporation DTCC at 55 Water from loading American banks and broker- behest of Bush’s Treasury Secretary Henry street in Manhattan was flooded. Inside the age houses with computer viruses would be Paulsen and jammed through the biggest vault was $36.5 trillion in securities from Israel and Wall Street. There are probably a bailout of Wall Street in our nation’s history. the US and 122 other countries. In 2011 lot of bankers in the City of London who But now, as the Bank of England, a key DTCC settled the clearance of almost all would also love to catch that same computer player in the ongoing Eurozone crisis, an- securities transactions in the US totaling virus. In France during the recent bank runs nounces that former investment banker 1.7 quadrillion dollars. Was the only physi- bankers pulled the plug on their computers. Mark Carney will be its new chief, we can’t cal copy of your investment just destroyed? Then they told their customers they could afford to ignore what’s happening around This is a list from Wikipedia of the types of not get access to their money today. the world. certificates that DTCC handled and were The DTCC has been experiencing hun- Steadily – and stealthily – Goldman just flooded out: Stocks, corporate and mu- dreds of millions of dollars in failures to Sachs is carrying out a global coup d’etat. nicipal bonds, unit investment trusts, gov- deliver transactions. An investor who shorts There’s one tie that binds Lucas Pa- ernment and mortgage backed securities, stock is supposed to borrow someone else’s pademos in Greece, Henry Paulsen in the money market instruments, and over-the- shares at his brokerage. If he sells short United States, and Mark Carney in the UK, counter derivatives. It also manages transac- without borrowing your stocks, then he can and that’s Goldman Sachs. All were former tions between mutual funds and insurance just pocket the money if he knew on what bankers and executives at the Wall Street carriers and their respective investors. day that nasty virus wiped out all bank and giant, all assumed prominent positions of Hold on to your wallet. There is even brokerage records. power, and all played a hand after the global more and bigger fraud coming your way A virus could conveniently wipe out very, very soon. I do not care if a few hun- all bank and brokerage records. It would dred trillion dollars in claims for Credit eliminate all lawsuits. Of course all of your Default Swaps are not paid out. Nobody money would belong to the bankers. Your BookStore has that much money anyway. Just cancel only recourse would be tar and feathers and all the CDS that guaranteed all of those asset seizure. But that is why the bankers Books by Hazel Henderson, W.F. bonds in Europe and for the returns on US have passed the Patriot Act, the John Warner Hixson and William Krehm can be Treasurys. The only proof you have that you Defense Authorization Act of 2007 and the ordered online at www.comer.org. own a stock or have money in a bank is an NDAA. That is why they bought 1.6 bil- entry in a computer owned and operated by lion 40 caliber hollow point rounds, 30,000 By William Krehm: known criminals. drones and set up 805 FEMA and National • Towards a Non-Autistic Economy Enter the sons of Stuxnet. The Stuxnet Guard camps. That is why they created the – A Place at the Table for Society computer virus was created by the US and Department of Homeland Security and the Israel to attack Iran’s nuclear power plant. TSA. That is why DHS hired more than • Babel’s Tower: The Dynamics Stuxnet was targeted at Siemens corpora- 200,000 contractors. That is why they cre- of ­Economic Breakdown tion controllers. It was found to somehow ated InfraGard which gives private corpora- • The Bank of Canada: A Power spread all the way to Japan where some have tions the right to kill you if they imagine Unto Itself accused an Israeli security firm of loading you pose a threat. That is why they created the virus into the controllers at nuclear 72 Threat Fusion Centers to get control of • Democracies and Tyrannies of power plants prior to Fukushima. Flame local police. That is why their courts have le- the Caribbean and other viruses were also created by the galized torture by calling it pain compliance. • How to Make Money in a CIA and Israel. Senator Joseph Lieberman And that is why they have been blowing up Mismanaged Economy and spokesmen inside the Obama admin- buildings with Americans inside sine 1993. istration have repeatedly accused Iran of • Meltdown: Money, Debt and attacking American computers with Denial Goldman Sachs’ Global Coup D’etat the Wealth of Nations of Service and DNS attacks. If you do not Posted by Steve Beckow, November 27, • Price in a Mixed Economy – know what these are, you can call anyone 2012. By Thom Hartmann and Sam Sacks, Our Record of Disaster who has an Internet radio network opposed The Daily Take, Op-Ed. to the NATO invasions of Libya and Syria When the people of Greece saw their www.comer.org June 2013 Economic Reform | 11 financial meltdown of 2007-08, thus mak- housing bubble in the United States. The ing the Great Depression, could put an end ing sure Goldman Sachs weathered the shockwave then ran across the Atlantic, hit- to the bloodshed and misery? storm and made significant profits in the ting Europe and turning Goldman’s debt- It’s because re-writing mortgages would process. masking deal with Greece years earlier sour, force banks like Goldman Sachs to take a But that’s just scratching the surface. thus deepening the crisis. hit. And thanks to the game they’ve created, As Europe descends into an austerity- All of these antics should have brought they actually make more money when a induced economic crisis, Goldman Sachs’s about the demise of Goldman as well, but home they own is foreclosed on. people are managing the demise of the with their alumni in key policy positions Why, despite mountains of evidence, continent. As the British newspaper The on both sides of the Atlantic, Goldman not have banksters at Goldman Sachs and other Independent reported earlier this year, the only survived, it flourished. Wall Street institutions not been thrown in Conservative technocrats currently steering As the DailyKos sums up, “The normal jail for defrauding customers, manipulat- or who have steered post-crash fiscal policy scenario usually involves helping a nation ing LIBOR interest rates, and throwing in Greece, Germany, Italy, Belgium, France, hide a problem and sell its debt until the thousands of Americans out of their homes and now the UK, all hail from Goldman problem blows up into a bubble that bursts illegally in a massive robo-signing scandal? Sachs. In fact, the head of the European in a spectacular way…Goldman Sachs then It’s because we have a two-tiered justice Central Bank itself, Mario Draghi, was puts their ‘man’ into a position of power to system in which those in power, like Gold- the former managing director of Goldman direct the bailouts so that Goldman gets all man Sachs executives, get a slap on the wrist Sachs International. its money back and more, while the nation’s when they steal $50 billion, but people like And here in the United States, after Trea- economy gets gutted.” you and me go to jail for stealing a 7-11 sury Secretary and former Goldman CEO For years, tinfoil hat crazies who’ve book- Slurpee. Henry Paulsen did his job in 2008 securing marked Glenn Beck’s websites and often Now does it make sense why Wall Street Goldman’s multi-billion dollar bailout, he appear as “experts” on Fox so-called News was bailed out and Main Street was sold was replaced in the new Obama administra- have warned us about a one-world govern- out? tion with Tim Geithner who worked very ment. The latest threat, according to them, In this post-crash world, where agents closely with Goldman Sachs as head of the is Agenda 21 and the creation of a Soviet- of Goldman Sachs have infiltrated key po- New York Fed and made sure Goldman re- style world authority that will confiscate pri- sitions of power all around the world, we ceived more than $14 billion from the bail- vate party everywhere, redistribute wealth must all fundamentally re-understand how out of failed insurance giant AIG. to developing nations, and force us all to we view the global economy and just how What’s happening here goes back more live by new global laws that sacrifice our much effect our democratic institutions than a decade. national sovereignty. It’s totalitarian govern- have on this economy. In 2001, Goldman Sachs secretly helped ments and not transnational corporations We no longer have an economy geared Greece hide billions of dollars through the that we should be afraid of, they warn. to benefit working people around the world; use of complex financial instruments like But when the tinfoil hat is removed, you we have an economy that’s geared to exploit credit default swaps. This allowed Greece can see that a sort of one-world government working people for Goldman Sachs’ profits. to meet the baseline requirements to enter has already been established in a far more Trader Alessio Rastani told the BBC in Sep- the Eurozone in the first place. But it also subtle form, through the rise of Goldman tember before Goldman’s Lucas Papademos created a debt bubble that would later ex- Sachs and their colleagues in the Wall Street was installed as Greece’s Prime Minister, plode and bring about the current economic elite. “We don’t really care about having a fixed crisis that’s drowning the entire continent. A million questions arise when looking economy, having a fixed situation, our job But, always looking ahead, Goldman pro- at what’s happening around the world. But is to make money from it…. Personally, I’ve tected itself from this debt bubble by betting many of these questions can be answered, been dreaming of this moment for three against Greek bonds, expecting that they once it’s acknowledged that Goldman Sachs years. I go to bed every night and I dream would eventually fail. alumni have executed a global coup d’etat. of another recession.” Rastani continued, Ironically, the man who headed up the Why are the working people of Greece, “When the market crashes, …if you know Central Bank of Greece while this deal was Portugal, Spain, and Italy suffering un- what to do, if you have the right plan set being arranged with Goldman was – drum- der austerity and being asked to sacrifice up, you can make a lot of money from this.” roll please – Lucas Papademos. their pensions, their wages, and their jobs And as we’ve seen over the last decade, Goldman made similar deals here in the when, after five years, it’s clear these policies Goldman Sachs knows exactly what to do. United States, masking the true value of are only making these nations’ debts even They’ve had the right plan set-up, and it’s investments, then selling those worthless harder to pay off? nothing short of a global coup d’etat. investments to customers while placing It’s because Goldman Sachs is sucking As Rastani bluntly told the BBC, “This bets that those same investments would the last remaining wealth out of those na- is not a time right now for wishful thinking eventually fail. The most notorious example tions to recoup whatever failed investments that governments are going to sort things was the “Timberwolf” deal, which brought they made before the Crash. out. The governments don’t rule the world, down an Australian hedge fund, and which Why have thousands of homeowners Goldman Sachs rules the world.” Goldman Sachs banksters emailed each in the United States turned to suicide, do- ❧ ❧ ❧ otherabout, bragging, “Boy, that Timber- mestic violence, and even mass murder wolf was one shitty deal.” when faced with home foreclosure, when a Our Comment. What a world, squashed This sort of behavior by Goldman simple solution like re-writing mortgages, and prayed upon, completely out of shape. helped inflate, and then eventually pop, the which F.D. Roosevelt did successfully dur- That we, the suckers, have “inherited.” W.K.

12 | Economic Reform June 2013 www.comer.org Will Omnibus Bill Influence Bank of Canada’s Independence? Flaherty Should Explain. By Kevin Carmichael, The Globe and dence of the central bank and other insti- Does adding veto over hiring decisions Mail, May 29, 2013 tutions at last week’s committee meeting. change anything? That’s what Ms. Nash Add Jim Flaherty to the list of activist “They can’t just go do what they want with wanted the finance committee to think shareholders who are attempting to exert taxpayers’ money.” through. And for good reason: It’s not dif- influence over corporate suites across North The Harper government already is fac- ficult to invent a scenario under which Bill America. ing questions from some economists about C-60 could be used to interfere with the The Finance Minister, on behalf of the its respect for central bank independence. Bank of Canada’s conduct of monetary government and taxpayers, is seeking con- It chose Stephen Poloz as the next Bank of policy. trol over the hiring practices of the Crown Canada governor despite overwhelming ex- Say the governor wanted to hire a tal- corporations that operate at arm’s length ternal support for Tiff Macklem, the central ented banker who worked at an investment from politicians. bank’s senior deputy governor. Yet it did bank that had become the focus of public Bill C-60, the omnibus legislation that so without offering a convincing explana- vitriol for its role in a global financial crisis. implements the provisions of Mr. Flaherty’s tion for shunning the prohibitive favourite, Would Cabinet interfere with the appoint- latest budget, includes language (Part III, opening the door to suggestions that the ment if there were a public outcry? Or to Division 17) that would give cabinet an ef- appointment was political, especially since prevent one? fective veto over salary decisions of Crown Mr. Flaherty took an unusually public role It is impossible to rule out the possibil- corporations, including the Bank of Cana- in the selection process. (“The first time ity. Yet such a scenario hardly is far-fetched. da, the Canadian Broadcasting Corp. and he does something people don’t like, they Bank of Canada Governor Mark Carney the Canada Pension Plan Investment Board. are going to ask if he’s doing it because the hired Tim Hodgson, the former head of “All of them are accountable to the tax- minister wants him to,” said David Laidler, Goldman Sachs’s Canadian operations, as a payers of Canada,” Mr. Flaherty told the a professor emeritus at the University of special adviser in 2010. Would Mr. Carney House of Commons finance committee Western Ontario and a former adviser at the have thought twice if he knew his inter- last week. “This makes entirely good sense Bank of Canada.) nal appointments risked political censure? to me.” Some will conclude that Ms. Nash is try- Again, there’s reason to wonder. And sud- It makes less sense to the Friends of ing to exaggerate these concerns for her own denly, we’re on a slippery slope: a simple Canadian Broadcasting, which worries the political gain. After all, what is objection- “accountability” measure risks hurting the proposal compromises the CBC’s journal- able about institutions that do the people’s central bank’s reputation as an independent istic independence. And it makes less than work while being answerable to the people’s actor. entirely good sense to Peggy Nash, the representatives in Parliament? Perhaps there are good reasons for the Toronto member of Parliament and New At first glance, there is nothing wrong government to shorten the tether of the Democratic finance critic, who asked the with it. But take a second look, and it be- Bank of Canada and other Crowns. How- finance committee to study the measure. comes less clear that this issue is as clear-cut ever, the government has yet to explain why (Her motion was rejected.) as Mr. Flaherty suggests. it’s necessary. Are the boards of directors Bill C-60 would, among other things, The Bank of Canada’s mission, as set out of those institutions ineffective? Is payroll permit cabinet to order a Crown corpora- with the government, is to keep inflation growth at Crown corporations out of con- tion to seek Treasury Board approval to hire advancing at an annual rate of 2 per cent. trol? Is cronyism rampant? non-union employees. And then, the Trea- Independence is fundamental to the way Or does the Prime Minister simply want sury Board “may impose any requirement inflation targeting works. Executives and to exert more influence over the quasi- on the Crown corporation with respect to investors will base their decisions on a 2 per independent arms of government? the terms and conditions of employment of cent rate of inflation if they are confident Bill C-60 raises all these questions and those employees.” technocrats will be guided by nothing else. more. Mr. Flaherty is a believer in account- Ms. Nash is wary of the effect that provi- The closer politicians get to the day-to-day ability. He shouldn’t mind answering them. sion could have on the Bank of Canada’s operations of the central bank, the less the ❧ ❧ ❧ ability to go about its business without the public can be sure monetary policy will be worry of having to placate politicians. While set without consideration of the election Our Comment. Good question. The the central bank is treated as a special case cycle. world is still missing a convincing answer in many of the government’s administrative No one thinks central banks should op- to it. W.K. standards, Bill C-60 states explicitly that the erate as free agents. In the case of the Bank hiring provisions would apply to the Crown of Canada, the government sets the direc- corporation. tion of monetary policy by appointing the VISIT THE COMER WEBSITE “There is a distinction between indepen- governor and signing off on the central www.comer.org dence in some areas and accountability,” bank’s policy mandate. The institution is Mr. Flaherty said when Ms. Nash raised her supervised by a board of directors made up Tell your friends about it. concerns about the operational indepen- of government appointees. www.comer.org June 2013 Economic Reform | 13 value, and deriving no personal benefit from the distribution of his handiwork beyond Fantopian Update the cost of paper and printing. The engravings were judged to be objets An excerpt from Fantopian Update by he was a populist who was concerned for d’art which the public were pleased to ac- James Gibb Stuart, Ossian Publishers Ltd., the happiness and well-being of the society cept and exchange and freely circulate, and www.ossianbooks.co.uk. around him, when he found that his work even the most ingenious of the bankers’ With grateful acknowledgements to Mr. commanded an intrinsic value, he devel- lawyers could not establish this as a breach Ronald Morrison for the research which first oped a charitable instinct for bestowing of the law. inspired this anecdote. some of his coveted designs upon the dis- In retaliation, the various private bank- I wonder if we could contrive some tressed areas of the community, where relief ing houses seized and sequestrated the de- magnificent myth that would in itself carry organizations and those catering for special sign notes whenever they came into their conviction to our whole community – Plato, needs soon discovered that they could trade hands, using them as collateral for the issue The Nobel Lie the paper engravings for food and shelter, of negotiable bank credit which was loaned and all the things that a poverty-stricken out at the going rate of interest. They also Foreword environment would most require. hinted darkly at the dire economic con- Fantopia is a fantasy land – like Lilliput In response to increasing demand, the sequences that might ensue if Fantopians in that the people are small but the cen- Engraver moved on to produce a range of persisted in this absurd flirtation with what tral character big, though it’s not Gulliver designs that were even more remarkable was at best a form of funny money, unfit to we encounter, but he constantly growing than the first, and stamped them with de- be traded in the same market place as the debt burden. Yet the fantasy is also close to nominations in Fantopian paper crowns, good sound orthodox finance which it was home. The language has a Scottish accent, so that the thankful recipients would know their business to purvey. but we all live in Fantopia, a land where the what value to put on their acquisitions politicians don’t understand the problem, when they were exchanged for the necessi- A Need for Poverty in the economists keep quiet for fear of being ties of life. The engravings spread far and the Midst of Plenty thought eccentric, the bankers rule – not wide across the queendom, were universally This was not a threat to be taken lightly, OK – and personally I feel like the Anti- acknowledged and accepted, and stimulated for the bankers had much power and in- quarian struggling to understand. business and commercial activity wherever fluence in Fantopia. At the advent of the Monetary reforms will welcome this fan- they appeared because they put purchas- New Era a benign Chancellor of the Ex- tasy because it exposes a reality. The People’s ing power in the hanks of the erstwhile chequer had bestowed upon them total credit has been stolen and turned into credit deprived, and sought out the otherwise control of interest rates and money aggre- cards and overdrafts, benefiting the bankers unused resources within the economy. gates, and all the other regulatory devices but crushing the real and original owners The farmer and the market gardener which were intended to monitor economic under a debt mountain. were getting better prices for their produce; activity throughout the length and breadth Whether we live in Fantopia, Scotland or no one with energy and skill, and the desire of the land. They were to be his champions elsewhere, we’re all bamboozled by bankers. to use them, was denied an opportunity in the battle against Inflation, portrayed They’ve found an infallible way of robbing to be gainfully employed; the professional everywhere as a frightful monster which, all of us of the Seigniorage that belongs to classes found fresh demand for their experi- if left unchecked, would devour the na- the People and of the power of the People’s ence and their acumen, and the scholar and tion’s means and substance, and ravage the credit. In return they’ve shackled us with teacher for their knowledge. Almost univer- financial fabric upon which its prosperity chains of debt. sally in those areas where the design notes depended. The power of the People’s credit should were freely circulating, there was an uplift- The trouble was that almost everyone be used to ensure that whatever is socially ing of that mood of crime and despondency seemed to have a different definition ofin - and physically possible is also financially which characterizes a disintegrating society. flation, and few could agree about its effects possible, and the kind of understanding that Everyone knew that they could immediately and causes. In the old days of strikes and James Gibb Stuart brings can help us to see trade the Engraver’s artistry to the benefit of industrial disruption it had been diagnosed this, and should dissipate the lack of self- themselves and their families. as a situation where too much money was confidence which has prevented us acting to Only the bankers and economists were chasing too few goods, and most people con- take power from the merchants of debt. En- worried. They said that the design notes had sidered that to be a fair enough explanation joy your Fantopia holiday. But learn from it become a new kind of currency which would of what might happen in an era of austerity. Austin Mitchel be vastly inflationary because it increased the But when automation and technology had MP for Grimsby money supply, and encouraged excess activ- solved the manufacturing problem, and the ity within a monetary system whose checks shops and supermarkets were packed with The Artistic Philanthropist and balances depended upon a continuing many more goods than the public could Once upon a time, in a far-off never-nev- measure of unrequited demand. want or need to buy, there had to be another er land of Fantopia, there lived a Talented They tried to have the Engraver ar- reason for the persistence of inflation in Engraver who worked on specially etched raigned as a forger and counterfeiter, but an economy where the limiting factor was and watermarked paper to produce beauti- failed to substantiate the charges because money, and goods were there for the asking. ful designs which for their artistry became he was shown not to have peddled his notes The economists said that the matter was greatly prized and admired. And because deceitfully, relying purely upon their artistic complex, much more so than the ordinary

14 | Economic Reform June 2013 www.comer.org person could be expected to understand. ate that degree of unsatisfied demand in the Due to the nature of the terrain in each case, Money supply was not finite, as so many economy which was so utterly necessary if road bridges were eminently practical, and people imagined. It could always be in- fiscal targets were to be achieved. People it became a pressing priority in the council creased on demand, and if you created too just had to be made to realize that every- chambers of both municipalities to mar- much demand, you were back to the situa- thing from the food they ate, and the water shal the construction skills, experience and tion of chasing too few goods. they drank – perhaps one day even the air expertise that would be necessary to bring The trick, as they explained it, was to they breathed – came at a price, a price that their respective projects to fruition. But see that a certain level of demand was never would have to be paid if this Inflation mon- whereas the town fathers of Tumbledum satisfied. It meant lowering the expectations ster was to be fought to a standstill. proposed to pay for the entire outlay by of certain sections of humanity, deferring On all those matters, both the bankers means of sound city finance – and engaged their prospects of social and material uplift and the economists agreed. They felt com- a renowned firm of merchant bankers to so as to cultivate a pool of idle resources pelled to agree, because within the limita- guide and advise them – the inhabitants of which could always be used to soften the tions of the economic model upon which Tumbledee were electrified by the news that impact when there were signs of increased they had founded their monetary science an their elected members had been in touch activity within the economy. It meant also their reputations, they could see no means with the Talented Engraver, who was prom- that though individuals of energy and abil- of maintaining market equilibrium and so- ising to produce a unique range of designs ity would always find ways to break out of cial control without that pool of idle labour which, stamped in appropriate denomina- his contrived poverty trap, that opportunity and unused resources. If they were kindly tions, would be presented as collateral for was best denied to the majority, lest the en- fellows at heart, they might occasionally fees, stage payments and all the other costs tire system be thrown out of balance. Noth- have admitted to themselves that they had and expenses that would fall due during the ing, they said could be more detrimental to created a vested interest in human misery. various stages of construction. economic stability than if an entire popula- It did not diminish their concerns about the Needles to say, there was surprise and tion was prompted to reach out for a share activities of the Talented Engraver, who was fury, disbelief, mockery and derision all at of the wealth and resources that human threatening to eradicate poverty wherever once in the City. Over time the bankers and skills and ingenuity, plus technology and he found it. financiers had become accustomed to the a bountiful Mother Nature, had placed in By the focused distribution of his artistic design notes circulating amongst the poorer abundance around them. design notes, he was putting hope and am- communities, stimulating a certain amount “The poor are always with us,” said the bition and purchasing power in the hands of enterprise and commercial activity where dignitaries of Church and State, and if of the dispossessed. He was reviving lo- none had existed before. they said it with regret and piety, and ac- calities which had lost faith in themselves as They had never ceased to grumble at companied it with a prayer for the ultimate they despaired of Authority, but were now it, referring ominously to its effects on salvation of all mankind, the dictum was being made to realize that they had in their the money stock and the demand/supply generally accepted without qualm or ques- own hands the means of their salvation. equation, warning that it would all come tion. How in any case could it be chal- Using the Engraver’s tokens as their store to grief in the end. They had accepted it lenged when it was backed up by so much of wealth, they were repairing their housing because it was relatively significant, and be- prestigious authority, and the hard facts of stocks, cleaning their streets of vandals and cause they thought they could contain it by economic history? criminals, encouraging self-help and com- refusing to re-issue Engraver notes which Everyone knew that life itself was a ka- munity spirit and local enterprise, mop- came across their counters. They claimed leidoscope of startling contrasts – of wealth ping up and motivating human resources additionally that it was only through this and want, and rich and poor, of privilege which had previously been left to wither policy of self-denial that they had averted and deprivation, of feast and fast, and burst in idleness. the vast inflation which might otherwise and thirst, and gluttony and starvation. The fact is that so long as money has to have erupted. So why should there not be poverty in the perform two functions – that of “tickets to But to consider such unorthodox meth- midst of plenty? For it was a tough world consume” and at the same time that of a store ods for the funding of a major infra-struc- where no one was owed a living, insisted of “wealth in itself” available for saving and tural project costing in excess of a million those hard-headed and persevering econo- investment – there will inevitable be a shortage paper crowns? It was absurd. It had never mists. of purchasing power in the consumers’ market. been done before. It would make a nonsense Despite occasional impressions to the H.N. Smith MP, The Politics of Plenty, of Exchequer constraints on the economy. contrary, there was invariably a scarcity of G. Allen & Unwin Ltd. London, 1944 It would destroy the value of the Fantopian money and resources for all the things they crown on the international exchanges. It really wanted to do. Thus the truly desirable Bridging the Dee and the Dum would cause inflation and depression, and things could only be afforded by cutting The controversy was still raging when inevitably a string of bankruptcies among back and downsizing, by minimizing on two major construction projects began to the contractors. The bridge would never costs and maximizing on profits, by sack- attract nationwide attention. Tumbledum be finished. Its approach works and initial ings and early retirements, by mergers and and Tumbledee, were two similar towns spans would lie moldering and rusting, takeovers, by the pruning of margins, the situated at extremities of the queendom, waiting for some wiser heads to assume sharpening of competition, the remorseless each built upon broad river estuaries which, responsibility when the financing could be curbing of expenditure on everything that with the rapid development of motor traffic, more competently handled. could not be made to operate at a profit. urgently required bridging. By contrast, said the market analysts, Only by such stringencies could they cre- Engineering surveys were encouraging. Tumbledum would have its bridge on time, www.comer.org June 2013 Economic Reform | 15 and to specification. It would be up and Tumbledum Municipal Council to have any opinions on public money and functioning, and beginning to pay for itself, The Financial Controller submitted his finance. Even so, in the back rooms of the whilst the municipal fathers of Tumbledee Annual Report and Accounts for the first counting houses, and in the recesses of the were still contemplating the consequences year of operation of the new Tumbledum treasury, there had to be many doubts and of their folly. The citizens of all Fantopia Toll Bridge: questionings about this blatant challenge would come to rue the day when even a tiny A total of 557,904 vehicles used the to the tenets of monetary orthodoxy. Much minority of their number had been tempted bridge, excluding emergency & Council seems to hinge upon the mystique that had to pursue the illusory benefits of themaundy vehicles. Average toll paid per vehicle was been built around the techniques and skills money (a medieval distribution of the mon- 49.92 cents. (See Table 1.) of the Talented Engraver, whose ability to arch to the poor) as the Engraver’s notes had Analyst’s Report produce works of art with an immediate in- come to be called. Since this represents a small operating trinsic value had been the key to the remark- loss, with no repayment on Loan Capital, it able transformation whereby Tumbledee got No Tolls on the Maundy Bridge is assumed that initial toll charges were set its road bridge debt free, and there was a In this climate of threats and foreboding, too low, and should be increased by 50% dramatic alleviation of poverty in the ghet- both of the major constructional projects for the coming year. Even on a calculated re- tos of Fantopian cities. proceeded as they had been envisaged. De- duced usage of 446,500 vehicles, this would Since the Engraver was mortal, there had sign, style and execution were broadly simi- raise projected earnings to 334,875 Crowns, to be an end to his talents and his artistic lar, and with friendly cooperation between sufficient to cover the shortfall. output, a circumstance which comforted the respective firms of engineering consul- Negotiations are also proceeding with the bankers and financiers, but concerned tants, problems were ironed out as they were Toll Operator’s representatives for new all those who found a rare merit in his encountered, so that there was a minimum shift-working arrangements which would accomplishments, and thought society at of planning hold-ups and delays. reduce the payments for unsocial hours. large should find means of consolidating his Only in the manner of financing did By such economies, and curbs on miscel- achievements into some form of permanent the contracts differ. At Tumbledum, when laneous expenses, it would then be hoped advantage. It meant coming to a proper staged disbursements were due, these were to maintain the changes for the foreseeable understanding of what had happened in the simply credited in bank drafts drawn upon future, though this would depend on usage Fantopian economy when his design notes one of the most highly respected of City numbers not falling below the calculated came to be accepted by the public as having institutions. minimum. an immediate value. For the progress payments at Tumbledee, There is also the question of fiscal policy Did that make them a new type of mon- the Engraver produced designs of such art- on a national scale, where an increase in ey? And was there a danger that other experi- istry and beauty that they immediately com- lending rates could seriously affect the item ments of this nature could spring up at any manded their face value in the market, and for interest charges. time? Was the entire structure of orthodox the construction work went on unhindered. finance, built up over the centuries by us- Both bridges were completed on time. Dealing with the Design Notes age and protocol, to be jeopardized by the For the Tumbledeenies traffic rolled free- Despite the furor which had been created next public-spirited philanthropist to put a ly across the estuary as soon as the visiting in banking circles, very few of the significant novelty on the market, and have it accepted dignitary could deliver his speech and cut facts of the matter had got through to the as collateral for desirable social projects, in the red tape at the opening ceremony. For front pages of the mass circulation newspa- preference to proper institutional funding? the Tumbledummies there was a short de- pers, where it was effectively sidelined by the And if that happened, where would it all end? lay as the builders hurriedly installed tool unending flow of sports spectaculars, or the To make matters even worse, the in- booths at each end of the approach roads. latest sex scandals affecting stage stars and habitants of Tumbledum had organized a This was necessary to cover the cost of the political public figures. campaign against the tolls on their road bank interest, which had been levied pro- This was how the regime of Him the bridge. A number of prominent citizens gressively on each of the stage payments, Incomparable preferred it to be, because kept driving across the bridge, and refusing and was now accumulating. though Fantopia was constitutionally a to pay the tolls, until they got themselves It appeared that Tumbledummy road democracy, the people were not expected arrested. There was considerable publicity users would have to pay their share of that when their cases were cost every time they traveled to and from Table 1: Financial Statement brought to court, and those expanding suburbs on the other side Crowns Crowns invidious comparisons of the estuary. It was an item which would Income from tolls 278,500 were inevitably being never go away, for the interest was being Wages and salaries 127,000 made with the bridge compounded, and even with and escalation at Tumbledee, which Unsocial hours premium 27,402 of toll charges in succeeding years. The was toll-free because it Social Security, etc. 12,721 debt on the Tumbledummy road bridge had been financed by Maintenance and sundries 64,215 would be greater than it had been at the the maundy money. beginning. Consolidated loan and bank interest 71,532 Meanwhile news of On the other hand, there were no tolls Analyst’s fees, capped at 1,000 the Talented Engraver and the road bridge at Tumbledee. By use 303,870 278.500 had leaded abroad and of the maundy money, it had already been Operating Loss 25,370 his design notes were bought and paid for when it was finished. 303,870 303,870 tending to become

16 | Economic Reform June 2013 www.comer.org collectors’ items. Already some of his ear- ing them out of circulation at every oppor- orthodoxy on their shoulders. So there was lier numbers had appeared in catalogues at tunity, listing them as gilt-edged securities, relief all around when, in true Fantopian metropolitan auction houses, where they and showing them as reserves on their bal- tradition, the Government of Him the In- fetched sums considerably in excess of their ance sheets. It was all very, very peculiar, comparable set up a small working party to denominated value. and very, very unsettling for those who felt advise on their future course of action. Grimly the trading banks were still tak- they carried the whole mantle of monetary To be continued.

Letters from COMER Readers

Dear COMER folks, ernment spending and services that will lead Our response: I’m the granddaughter of Geoff Hop- to sale of public assets in the near future. I The case is with the court and we are kins, a long-time COMER member and am attempting to contact as many institu- waiting for the next court date. organiser in the Saskatoon branch (his last tions that want to form a global initiative to Dear Sir, COMER meeting was held at his home only lobby the media, which will be difficult as Thank you for this information. I know a couple of weeks before he died at the age of they are owned by the BIG 4 – Vanguard, that the courts can take what would appear 95!), and a PhD student studying heterodox Blackrock, Statestreet, and Fidelity but have to be outrageously long periods to come to a economists in Canada. to try. An internet campaign wont work, ac- decision – I presume the judge must review I am dismayed to find that some of the tion is needed to knock on doors, distribute musty legal tomes to decide the issue; I read books my grandpa highly recommended information and get signatures. through most of the verbatim text of your were not to be found in Cambridge, UK, Nations have to get together and peace- lawyer, and to a layman such as me the case where I’m studying. The online copies are fully and simultaneously show that we know appears to be open-and-shut in your favour. 85 GBP or more, which is prohibitive, and what is going on. There countries without It’s my understanding that this phase of the I know from talking to my grandpa some a central bank and they are being attacked case is simply to get a decision to proceed to years ago that your goal is primarily to by the big 4 owned media as rogue states, court – is that correct? educate the public and that COMER often the US is aiding rebels in Syria, The North In other words, this case, which I look provides packages of books to libraries at a Koreans are about to go to war and are ter- upon as the bedrock, underlying primary discounted price. rorists and Iran is building WMD – all lies. cause of the entire social backwardness/ In essence I’m wondering if I can be I am after your advice to begin action devolving fabric of our country – infra- considered a library for your purposes, and here in Australia as your organisation has structure, health care, education, social pro- would it be at all possible to get a pack- been successful in gaining a day in court to grams, etc – is in the hands of one lone age of books (hopefully including Paul fight back. I am after ideas to give to gov- individual? Needless to say, the weight of Hellyer’s Funny Money, William Krehm’s ernments on the design if a trillion dollar the vested interests lies heavily on his mind, Meltdown, and anything by John Hotson; coin that could be coined to wipe the public given that (if I understand correctly) a deci- I’ve had a hard time finding them at less- debt, the US needs 17 of them!! I have sion against you would halt the attempt to than-extortionist prices) from you. I’d also read Canada’s constitution and the Bank of rectify this egregious fraud in its tracks. And be interested in any other books you would Canada Act and yours like ours has in it the to what purpose? To line the pockets of a particularly highly recommend. I will hap- ability for the Government to print its own banking cartel. pily pay a fair price. money and control the money supply, we I have recently been thinking about this All the very best, have this in common I have attached these. issue in the global context: the unbelievable Ellen Quigley, PhD Candidate, Cam- I have been in contact with Restore Aus- poverty and decay of the USA, the situa- bridge University tralia, who are very similar to your organisa- tions in Greece, Spain, Portugal (where just Editor: The volumes mentioned will tion and are attempting to gain support for recently the PM announced the coming be provided free of charge to Ellen and to the Australian Constitution to be amended cuts of 30,000 government employees), the libraries at Cambridge University with to allow the holding of Referendums on is- Africa – that this infinite level of suffering COMER’s compliments. sues if enough support can be gathered by pe- being experienced by millions and millions ❧ ❧ ❧ tition of 140,00 signatures I will be in contact of human beings is all traceable to the inter- Good Morning, with other organisations as they are found. national banks. There truly is a “dark ruling I am writing to you as a concerned global I am hoping you will be in contact soon class” behind the smiling politicians – and if citizen residing in Australia. I am supportive and my best wishes are with you in the fight your case is won, will be an outrage to that of your cause 100% as we are faced with the for real freedom. structure. Are you aware of any petition that same dilemma, a central bank that has the Kind regards, has been created to support your case? power to issue and print interest free curren- Rick Searle Avaaz.org is a Canadian site where peti- cy, a central bank controlled by the Bank for ❧ ❧ ❧ tions in the public interest can be initiated International Settlement, the World Bank On April 27, 2013, Gregory Crook wrote: – they have a very successful track record – our government donating 7 billion dollars I have read the December 2012 proceed- globally. Please advise. to them and then today announcing that ings. Where is this court case now? Your feedback would be appreciated. Australia has a 7 Billion Dollar budget blow Thank you. Sincerely, out and need to implement cutting to gov- G. Crook, Perth, ON Gregory Crook, MSc www.comer.org June 2013 Economic Reform | 17 Certain Television Fare Can Help Ease Aggression in Young Children, Study Finds By Catherine Saint Louis, The New York The researchers surveyed the parents at Children watch a mix of “prosocial but Times, February 18, 2013 six months and again after a year about their also antisocial media,” said Marie-Louise Experts have long known that children children’s social behavior. After six months, Mares, an associate professor of commu- imitate many of the deeds – good or bad parents in the group receiving advice about nications at the University of Wisconsin, – that they see on television. But it has television-watching said their children were Madison. “Merely being exposed to pro- rarely been shown that changing a young somewhat less aggressive than others, com- social media doesn’t mean that kids take it child’s viewing habits at home can lead to pared with those in the control group. The that way.” improved behavior. children who watched less violent shows Even educational programming with In a study published Monday in the also scored higher on measures of social messages of empathy can be misunderstood journal Pediatrics, researchers reported the competence, a difference that persisted after by preschoolers, with negative consequenc- results of a program designed to limit the one year. es. A study published online in November exposure of preschool children to violence- Low-income boys showed the most im- in The Journal of Applied Developmental Psy- laden videos and television shows and provement, though the researchers could chology found that preschoolers shown edu- increase their time with educational pro- not say why. Total viewing time did not cational media were more likely to engage gramming that encourages empathy. They differ between the two groups. in certain forms of interpersonal aggression found that the experiment reduced the chil- “The take-home message for parents over time. dren’s aggression toward others, compared is it’s not just about turning off the TV; Preschoolers observe relationship con- with a group of children who were allowed it’s about changing the channel,” said Dr. flict early in a television episode but do not to watch whatever they wanted. Dimitri A. Christakis, the lead author of always connect it to the moral lesson or “Here we have an experiment that pro- the study and a professor of pediatrics at the resolution at the end, said Jamie M. Ostrov, poses a potential solution,” said Dr. Thomas University of Washington. the lead author of the November study and N. Robinson, a professor of pediatrics at “We want our children to behave better,” an associate professor of psychology at the Stanford, who was not involved in the study. Dr. Christakis said, “and changing their me- University of Buffalo. “Giving this intervention – exposing kids to dia diet is a good way to do that.” Preschoolers watch an estimated 4.1 less adult television, less aggression on tele- Until she began participating in Dr. hours of television and other screen time vision and more prosocial television – will Christakis’s trial, Nancy Jensen, a writer in daily, according to a 2011 study. Dr. Ostrov have an effect on behavior.” Seattle, had never heard of shows like Nick- advised parents to watch television with While the research showed “a small to elodeon’s Wonder Pets!, featuring cooperative their young children and to speak up during moderate effect” on the preschoolers’ be- team players, and NBC’s My Friend Rabbit, the relationship conflicts that are depicted. havior, he added, the broader public health with its themes of loyalty and friendship. Citing one example, Dr. Ostrov counseled impact could be “very meaningful.” At the time, her daughter Elizabeth, then parents to ask children, “What could we do The new study was a randomized trial, 3, liked King of the Hill, a cartoon comedy differently here?” to make it clear that yell- rare in research. The researchers, the Seattle geared toward adults that features beer and ing at a sibling is not acceptable. Children’s Research Institute and the Uni- gossip. In hindsight, she said, the show was He also urged parents to stick with age- versity of Washington, divided 565 parents “hilariously funny, but completely inappro- appropriate programming. A 3-year-old of children ages 3 to 5 into two groups. Both priate for a 3-year-old.” might misunderstand the sibling strife in were told to track their children’s media These days, she consults Common Sense the PBS show “Arthur,” he said, or stop pay- consumption in a dairy that the researchers Media, a nonprofit advocacy group in San ing attention before it is resolved. assessed for violent didactic and prosocial Francisco, to make sure that the shows her ❧ ❧ ❧ content, which they defined as showing em- daughter watches have some prosocial ben- pathy, helping others and resolving disputes efit. Elizabeth, now 6, was “not necessarily Our Comment. What is at issue, and without violence. an aggressive kid,” Ms. Jensen said. Still, must not be lost sight of, is that utilizing The control group was given advice only the girl’s teacher recently commended her carefully chosen social information is likely on better dietary habits for children. The as very considerate, and Ms. Jensen believes to result in losing, and literally destroying, second group of parents were sent pro- a better television diet is an important all residual value of a carefully processed gram guides highlighting positive shows for reason. analysis. After the evaluations undergone young children. They also received newslet- The new study has limitations, experts in the processes described, what remains ters encouraging parents to watch televi- noted. Data on both the children’s televi- is a fully embodied encounter between the sion with their children and ask questions sion habits and their behavior was reported processing already undergone and the basic during the shows about the best ways to by their parents, who may not be objective. nature of what remains to be done. Lose deal with conflict. The parents also received And the study focused only on media con- sight of that, and you destroy what has monthly phone calls from the researchers, tent in the home, although some preschool already been achieved, and make a new who helped them set television-watching aged children are exposed to programming and ever more critical stage of key analysis goals for their preschoolers. elsewhere. needed. W.K.

18 | Economic Reform June 2013 www.comer.org Power Shift, Part 2. How central bank stimulus is creating a global “bubble economy” The Illusion of Growth

By Neil Macdonald, CBC News. Posted and slightly more than double the $8.5 market that rests on a fantasy,” he says. April 30, 2013. Part 1 appeared in the May trillion these same institutions were hold- For the first time ever, there isn’t a single issue of ER. ing at the end of 2007, before the financial bubble out there, but an “entire world in Mark Grant sits on the aft deck of his crisis hit. a bubble. Every asset class, everything you yacht in South Florida’s spring sun, osten- The idea behind all this central bank can think of. Everything is in a bubble and tatiously relishing his wealth as only an largesse is to reflate the world’s money sup- something is going to prick it. American does, and dispensing advice. He’s ply after the disastrous meltdown of 2008 “The party,” he says with great certainty, made his money, and he likes to wear it. and, at the same time, push interest rates “is going to end.” Grant’s personality is as big as his man- down as far as possible in an attempt to get sion and as flashy as his collection of exotic people – and companies – borrowing and An Enormous Bet cars – he actually calls himself “The Wiz- spending again. Think-tank economists, who rely on ard,” a tribute to his own financial acumen. To date, however, the results have been econometric models and speak a language While we are talking, his cellphone rings mixed. The US economy has been inching so encoded as to be incomprehensible to intermittently, and the callers are usually forward, while Britain’s is teetering on a most people, tend to look down their noses serious moneymen. Bill Gross of Pimco, the triple dip into recession. Much of Europe is at analysts like Grant, referring to them as world’s largest bond agency, is a friend; his also deep in recession and sinking under the “the newsletter crowd.” praise adorns the dust jacket of Grant’s re- weight of high unemployment. But Grant has shown prescience. He cent book. Inevitably, the callers are seeking Whether the massive money-printing was among the very first to predict Greece’s investment advice. program known as quantitative easing has financial implosion, and he has correctly A nearly 40-year Wall Street veteran, prevented an even worse situation is debat- Grant is currently the managing director able. But this much is certain: It’s simply Stability risks: In a recent report, the of a Texas-based investment bank and the impossible to unleash such economic forces International Monetary Fund sets out three big “stability risks” it sees in unwinding all author of a daily must-read investment without serious consequences, intended and this quantitative easing: commentary called Out of the Box. unintended. • That a prolonged period of low-interest His advice these days to tycoons and rates might affect the solvency, and maybe small investors alike is simple and direct. Bubble Economies the level of risk-taking, of banks, pension For heaven’s sake, seek safety. Preserve your Just about everyone agrees the Dow funds and life insurance companies that require regular yield to keep afloat. capital. “Keep what you have.” Jones industrial average – the measure of • That, conversely, a quick interest rate spike To Grant, the central banks’ money blue-chip America – did not reach an all- could weaken loan performances and also printing has distorted the financial universe time high recently because of vibrant eco- hurt banks’ bottom line. beyond any sensible dimensions. nomic growth or fabulous performance by • That uncoordinated exit plans by the The Federal Reserve alone is churning the companies listed in that index. central banks might lead to currency out $85 billion a month, or just over a Markets are where they are principally devaluations and trade wars if certain central banks and their governments decide to go $1 trillion a year. The combined balance because the Federal Reserve has been gob- their own way. sheets (which reflect created money) for bling up US treasury bills, the safest invest- the European Central Bank and the 17 ment on Earth, in a deliberate attempt to pointed up the book-cooking and outright individual banks of the eurozone stand at force private investors into riskier assets, fraud in other eurozone economies. $3.45 trillion. like stocks. It’s a high-stakes form of market He is also far from the only one contem- The Bank of England, the most energetic engineering. plating a bad ending. money printer in the world relative to the The Fed has been acting in rare concert Recently, the Bank of International Set- size of the economy it serves, has printed with central banks worldwide to encourage tlement in Basel echoed Grant’s concern £375 billion (roughly $576 billion US), and borrowing and spending – and risk. And that markets are developing an easy-money is probably going to print more. The Bank because all the new money being unleashed habit; and the International Monetary Fund of Japan has just launched an aggressive has to flow somewhere, it’s been flowing, just published a paper acknowledging the money-printing program of its own, plan- among other places, into the equity markets. possibility of all this money printing (which ning to double the size of its balance sheet At the same time, the super-low interest it calls “monetary policy plus”) creating within two years. rates resulting from all this money printing widespread bubbles and difficult adjust- In all, at the end of 2012, the balance have heated up real estate markets in big ments down the road. sheets of the world’s largest central banks, cities worldwide – Toronto and Vancouver Ros Altmann, a pension manager and a those of the G20 nations and the eurozone, being perfect examples. governor of the London School of Econom- including Sweden and Switzerland, totalled Grant says the markets and governments ics, compares quantitative easing to treating $17.4 trillion US, according to Bank of Can- have developed an addiction to easy, cheap a sick patient with medication that doesn’t ada calculations from publicly available data. money to finance irresponsible borrowing. work, and then, when the patient gets sick- That is nearly a quarter of global GDP, “All this printing of money is creating a er, administering even more. www.comer.org June 2013 Economic Reform | 19 By acting in concert The financial markets scrutinize the ab- to push the world in breviated minutes after every meeting of the the same direction, the Federal Reserve committee that authorizes central bankers have QE, looking for any sign money printing is made some enormous about to end. bets. And, says John- That ending would signal a rise, perhaps son, “they’d better be even a sharp one, in interest rates, which right.” could hit the housing market hard. The trouble is, Homeowners with only a small amount they’ve been wrong in of equity and who are already stretched to the recent past. the limit would be sorely stressed. Central bank eco- Significant interest rate changes could nomic forecasts in also affect banks, pension funds and insur- recent years have ance companies, as well as small businesses sometimes been well that have been relying on cheap credit to off the mark, meaning expand payrolls. they, too, can be acting And higher interest rates would also slam The surge in “new money” on central bank balance sheets since 2008. on mistaken assump- into government budgets. Politicians have (International Monetary Fund) tions. come to rely on cheap money to finance Also, even someone their borrowing and spending. Of course, “It must stop,” she says. “It is hugely as seemingly omniscient as Alan Greenspan, the top people at the Bank of England, the dangerous. I think history will judge this the Federal Reserve chief through the Clin- Federal Reserve and the Bank of Canada all period very harshly.” ton and Bush years, publicly admitted his argue a return to normalcy can be managed. Still, the central bankers have at least as blunder in refusing to regulate the murky Just as the central banks have the power many fans as they do critics. world of credit default swaps, which acted to create money, says Canada’s Mark Car- Don Johnston, the former president of as accelerant in the 2008 disaster. ney, they have the power to pull money out the Treasury Board in the Trudeau govern- of the system, and will, slowly, as growth ment and a former director of the Orga- How to “Unwind” returns. nization for Economic Co-operation and Conservative economists have predicted They can begin selling off the assets Development, admires them greatly. for years that expanding the money supply they’ve bought with all this new money, “I think they have more credibility than will inevitably lead to inflation, or even and they have the all-important power to politicians,” he says, “and it’s been very hyperinflation. That, of course, has not set central interest rates. If growth takes off, fortunate that nearly all central banks are happened in this instance, mainly because in fact, they will have to do those things in independent of the political arm.” there’s been so little economic growth and order to contain inflation. Johnston concedes that the central banks’ because the world is awash in the produc- But no “unwind” will happen soon, says power at the moment is “immense.” But he tion of consumer goods. Carney. “The repair is ongoing.” adds: “We had a big fire, and they absolutely But the big question, nearly everyone In Florida, Mark Grant tells his clients had a critical role to play, and they played it, agrees, is whether the central banks can “un- that there are no good endings to all this, I think, extremely well.” wind” the unprecedented situation they’ve “only less bad endings.” Still, even Johnston, with his deep expe- created without massive disruption (not One of the big causes of the 2008 melt- rience in government finances, allows that least to their own balance sheets, which are down was too much cheap money, he notes, he doesn’t fully understand the complexities now stuffed with long-term, low-interest “and there’s a lot more now.” of today’s monetary policy, and the argu- bearing bonds as part of the quantitative Mainstream economists can’t agree on ments for or against opening the spigots as easing). whether an orderly unwind can happen. But much as they have been. It’s an impossible question to answer. then, as Don Johnston points out, “econo- mists don’t know what they don’t know.” Meanwhile, the central bankers all seem to have landed on the same side of the issue, and are marching in step, urging people to borrow and spend for the good of all. “Ultimately,” says Carney, “history will judge whether we got this right.”

Neil Macdonald is the senior Washington cor- respondent for CBC News, which he joined in 1988 following 12 years in newspapers. Before taking up this post in 2003, Macdonald reported from the Middle East for five years. He speaks English and French fluently, and some Arabic

20 | Economic Reform June 2013 www.comer.org